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Alan and Sara Winthrop are a married couple who file a joint income tax return. They have two children, and they have legitimate itemized deductions totaling $27,500. Their total income from wages is $243,500. Assume the following tax table is applicable:

Alan and Sara Winthrop are a married couple who file a joint income tax return. They have two children, and they have legitimate itemized deductions totaling $27,500. Their total income from wages is $243,500. Assume the following tax table is applicable:

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Alan and Sara Winthrop are a married couple who file a joint income tax return. They have two children, and they have legitimate itemized deductions totaling $27,500. Their total income from wages is $243,500. Assume the following tax table is applicable: Married Couples Filing Joint Returns If Your Taxable Income Is Up to $19,750 $19,750-$80,250 $80,250-$171,050 $171,050-$326,600 $326,600-$414,700 $414,700-$622,050 Over $622,050 What is their marginal tax rate? O a. 35.0% O b. 22.0% O c. 24.0% O d. 32.0% O You Pay This Amount on the Base of the Bracket e. 12.0% $0.00 1,975.00 9,235.00 29,211.00 66,543.00 94,735.00 167,307.50 Plus This Percentage on the Excess over the Base 10.0% 12.0 22.0 24.0 32.0 35.0 37.0 Average Tax Rate at Top of Bracket 10.0% 11.5 17.1 20.4 22.8 26.9 37.0
Transcribed Image Text:Alan and Sara Winthrop are a married couple who file a joint income tax return. They have two children, and they have legitimate itemized deductions totaling $27,500. Their total income from wages is $243,500. Assume the following tax table is applicable: Married Couples Filing Joint Returns If Your Taxable Income Is Up to $19,750 $19,750-$80,250 $80,250-$171,050 $171,050-$326,600 $326,600-$414,700 $414,700-$622,050 Over $622,050 What is their marginal tax rate? O a. 35.0% O b. 22.0% O c. 24.0% O d. 32.0% O You Pay This Amount on the Base of the Bracket e. 12.0% $0.00 1,975.00 9,235.00 29,211.00 66,543.00 94,735.00 167,307.50 Plus This Percentage on the Excess over the Base 10.0% 12.0 22.0 24.0 32.0 35.0 37.0 Average Tax Rate at Top of Bracket 10.0% 11.5 17.1 20.4 22.8 26.9 37.0
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